Jobs Number Disappoints High Expectations

I had a hunch that expectations were getting too high for today's jobs report. I actually think the market would have sold off on any number, just about. The consensus was for 500,000 new jobs, but yesterday there were comments coming out that the number could be 600,000 or above. So when the number printed this morning at 431,000, the market immediately began to selloff. Go figure.

The other piece of disconcerting news that the market is grappling with is comments out of Hungary where officials said their economy is in a grave situation and that talk of a default is not an exaggeration. Here we go again. The news hit the euro, pushing it down to new multi-year lows, and boosting the dollar in return. I think these types of news stories are going to be with us for a while, until each country with debt problems makes the headlines.

Oil prices are lower near $73, and gold is also down near the $1200 level. The 10-year yield is lower to 3.26%; and the VIX is up +8.0% to 31.84.

The energy sector is outperforming so far, bucking the early market weakness; industrials (XLI) are being hit hardest, -2.34%. Real estate (IYR, XHB) is also lower, as are financials.

We'll have to see if we get any short-covering into the close today. The S&P 500 needs to finish above 1189 to put in another positive week (its currently 1087).

Trading comment: There are a handful of stocks that are green this morning, and bucking the weakness. They include: ASPS, GOOG, CRM, VMW, NFLX, WLP. These are the names I would consider playing for a bounce early next week, as it appears buying interest in these names is strong.

The market is no longer oversold, but not overbought either. But with the VIX above 30, I still expect the market to remain choppy. So my trades are mostly short-term at the moment, until I see more solid signs of a bottom. Have a good weekend.

long ASPS, GOOG, VMW